01/11/24

US: Taiwan and US set to address double taxation issues

As published on: en.rti.org.tw, Friday 1 November, 2024.

The U.S. Treasury Department announced in a press release on Tuesday that the first round of talks on a comprehensive double taxation agreement is expected in the coming weeks.

The agreement is seen as a key advancement in strengthening economic ties. Taiwan and the U.S. anticipate significant benefits and a reduction of tax burdens that currently impede investment. Aside from encouraging broader investment, Taiwanese companies operating in the U.S. will receive tax treatment comparable to that of American treaty partners. The U.S. also sees these efforts aligning with the objectives of the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act.

The proposed tax agreement is likely to follow the U.S. Model Income Tax Convention and include items such as lowering withholding taxes on cross-border dividends, interest, and royalties; tax treatment of temporary cross-border workers, measures to prevent tax avoidance and information-sharing provisions to aid tax administration in both countries.

In response, Taiwan’s Finance Ministry said the U.S. is one of Taiwan’s primary trade and investment partners. It thanked both the U.S. administration and Congress for their longstanding support on this matter.

The American Institute in Taiwan (AIT) will represent the U.S. side during the negotiations and Taiwan will be represented by the Taipei Economic and Cultural Representative Office in the United States (TECRO).

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US Taiwan Double taxation